The neurons and sensory cells of the mammalian inner ear do not regenerate once they are damaged by toxins, excessive noise, or infectious agents. The recent discovery that mouse embryonic stem (ES) cells can be induced to differentiate into sensory cells of the inner ear in vitro provides a basis for characterizing the pathways by which this development from stem cell to inner ear cell occurs. The genes that promote this differentiation will be investigated and the genes will be selectively expressed in stem cell progenitors to determine the optimal conditions for generation of hair cells and spiral ganglion neurons. An assay system will be developed that uses reporter constructs that correlate to the cellular differentiation induced by the expression of both candidate genes and a library of inner ear genes. The information will then be used to produce inner ear cells from human ES cells and the resulting cells will be candidates for transplantation. The information on differentiation will also be useful in future attempts to activate endogenous stem cells either with small molecules or by gene delivery. The long term objective is to develop therapies that can replace cells lost to degeneration.